Why are Victims Protesting?

Fire victims have been protesting the proposed Plan by sending letters and emails to Governor Newsom, to Bankruptcy Judge Dennis Montali, to State and Federal Legislators, as well as holding public protests, and granting interviews to the press. You can find the email addresses and websites for sending letters and emails on the Links page. Fire victims’ major concerns are:

Stock – Fire victims are being paid in overpriced, high risk stock. Half of the victims’ settlement will be funded by common stock in the new, reorganized PG&E. The stock will be issued to the Fire Victim Trust (NOT to individual fire victims) and intermittently sold to fund cash payments to victims. In contrast, all other major creditors are being paid in cash up front on the Effective Date. Financial analysts have determined that the “price” of the stock for the Fire Victims Trust is highly inflated and is 30% to 50% higher than what the “Backstop Parties” will be paying on the Effective Date. Victims are protesting the gross unfairness of being forced to take the market risk of owning stock while Wall Street investors are getting cash and stock at a discount. Plus, it looks like the Fire Victims Trust will end up owning between 22% and 30% of the company after paying an inflated price. How is that fair?

Deferred payments -- $1.35 billion of the payments for the Fire Victims Trust will be deferred to as late as January 2022. In contrast, Subrogation claim holders and Public Entities will be paid in full immediately. Victims should not have to wait any longer than insurance companies and the government agencies that are supposed to help them. Many victims are financially desperate, and all victims need the money now to move on with their lives.

Payment of Criminal and other Fines by the Fire Victims Trust – The notion that the Fire Victims should be paying PG&E criminal and CPUC penalties ($204 million) is ludicrous and unfair in the extreme. As one fire victim said, it’s enough to make your head explode.

Federal and State settlement– Some fire victims were comfortable with the Fire Victims Trust taking stock because the stock might increase in value. However, under the proposed settlements with the State, some State agencies will be getting paid out stock gains and interest earned by the Fire Victims Trust. So those gains will no longer go only to fire victims.

Pressure from Attorneys -- Fire victims are getting pressure from their attorneys to vote yes and to vote immediately, often by text. This is occurring even though we have not received or had a chance to review the court-approved disclosure materials. Some fire victims have reported that their attorneys are threatening to fire them if they vote no and then pursue them for fees at the attorneys’ hourly rate. Fire victims are confused and intimidated by these tactics and don’t know where to turn for help.

Attorneys Fees – Victims are asking their attorneys and Judge Montali to cap attorneys’ contingency fees. Some firms are charging as much as 33% plus expenses, while others are charging as little as 20% plus expenses. Attorney’s contingency fees of 33% are typically justified if the attorney is taking a risk, such as going to trial where the verdict is uncertain, and the attorney might receive nothing. In addition, victims are finding out that the firms that are charging more are not necessarily doing more. In our opinion, a contingency of 33% is too high for a case where there will be no uncertain trial verdict, and payments will be guaranteed out of a trust (in other words, the attorneys are not taking any risk). A cap of 20% on attorneys’ fees is the maximum that is justified in this case.

Lack of Transparency – Victims are complaining that they are being asked to vote on a Plan when they have no idea how much they can expect to receive for their losses. They also complain that too much of the negotiation process has happened behind closed doors. We have no independent way to evaluate either the process or the outcome.

Absence of Safety Standards for the ‘new’ PG&E – NO victim wants to live through another wildfire or see any other Californian face such trauma. Victims are complaining that the proposed Plan does not do enough to compel PG&E to improve its infrastructure maintenance, upgrade, and safety practices.

Victims are not being “made whole” – The cash, stock, and other funding going into the Fire Victims Trust will NOT BE ENOUGH to cover all uninsured losses suffered by fire victims. PG&E, the Governor, and others promised that victims would be treated fairly and receive just compensation. Victims have learned that they are not being treated fairly by the proposed Plan, and they have good reason to believe that the subrogation rights holders, insurance companies, shareholders, bondholders, and PG&E executives are being treated far better than victims.